Many administrators migrating from IIS6 to IIS7 face this common scenario: you've accidentally created an Application when you really needed a Virtual Directory. Unlike IIS6 where this conversion was straightforward, IIS7's management interface doesn't provide a direct "Convert to Virtual Directory" option.

The most efficient method uses PowerShell with the WebAdministration module:

Import-Module WebAdministration
$appPath = "IIS:\Sites\Default Web Site\YourApp"
$vdirPath = "IIS:\Sites\Default Web Site\YourVDir"
Rename-Item $appPath $vdirPath
Set-ItemProperty $vdirPath -Name applicationPool -Value $null

For those preferring command-line tools:

appcmd set app "Default Web Site/YourApp" /applicationPool:
appcmd set vdir "Default Web Site/YourVDir" /physicalPath:"C:\YourPath"

After conversion, verify these settings:

• Ensure the converted item appears under "Virtual Directories" not "Applications"
• Check that no application pool is assigned
• Verify the physical path remains correct

For GUI users:

1. Open IIS Manager
2. Navigate to your application
3. Right-click → "Manage Application" → "Advanced Settings"
4. Clear the Application Pool field
5. Click OK to save changes

Watch out for these issues:

• Inherited web.config settings from parent applications
• Permission changes needed for the new virtual directory
• Potential breaking changes in relative paths

Many developers migrating from IIS6 to IIS7 face this common scenario: you've accidentally created an application when you meant to create a virtual directory, and now need to revert it without losing configurations. Unlike IIS6 where this was straightforward, IIS7's hierarchical configuration system makes it less obvious.

In IIS7+, applications and virtual directories are fundamentally different objects in the configuration schema. An application creates a new application boundary (with its own app pool, configuration, etc.), while a virtual directory simply points to alternative content.

// Configuration difference in applicationHost.config
 
       
    

Here's how to transform an application back to virtual directory using IIS Manager:

1. Open IIS Manager and navigate to your site
2. Right-click the application and select "Remove" (not Delete!)
3. Immediately right-click the parent node and select "Add Virtual Directory"
4. Use the same alias and physical path as the original application

For server administrators handling multiple conversions:

Import-Module WebAdministration
$sitePath = "IIS:\Sites\Default Web Site"
$appName = "ProblemApp"

# Remove application but keep content
Remove-WebApplication -Site "Default Web Site" -Name $appName

# Create virtual directory in same location
New-WebVirtualDirectory -Site "Default Web Site" -Name $appName -PhysicalPath "C:\inetpub\wwwroot\$appName"

Before converting, ensure you:

• Note any custom authentication settings
• Record special authorization rules
• Save unique request filtering values
• Back up web.config if it exists in the application root

Error: "The directory specified is invalid"
Solution: Verify the physical path exists and IIS_IUSRS has read access

Error: Configuration inheritance problems
Solution: Use appcmd to clear location tags:

appcmd clear config "Default Web Site/ProblemApp" -section:system.webServer/security/access